Employers looking to terminate an H-1B employee must make certain they follow regulations unique to H-1B employees. If an employer wishes to terminate an H-1B employee before their authorized period of stay, the employer may be liable for the employee’s back pay wages for the remaining period of stay, transportation costs back to the employee’s home country, and/or other remedies. In order to avoid such penalties, the employer must carry out a “bona fide termination” of the employment relationship. (INA § 655.731(c)(7)(ii)). A bona fide termination is executed only after the employer satisfies three requirements. The employer must: (1) notify the employee of the termination of employment, (2) notify USCIS that the employment relationship is terminated, and (3) provide the employee with the reasonable cost of return to their home country. (Limanseto v. Ganze & Compny, OALJ 2011-LCA-00005 at 6).

The first step in executing a “bona fide termination” is to expressly inform the employee that the employment relationship is terminated. This notification must be clear and unequivocal. The burden of proving the end of back wage liability remains with the employer. (Mao v. Nasser Eng’g & Computing Sevs. ARB 06-121, (ALJ 2005-LCA-036at 24)). As such, it is critical the employer keep any correspondence notifying the employee of termination.

Second, the employer must notify USCIS that the employment relationship terminated. Under INA §101 (a)(15)(H), the petitioner [employer] shall immediately notify the Service [USCIS] of any changes in the employment of a beneficiary [employee] which would affect eligibility under INA §101 (a)(15)(H). Terminating the employment relationship is considered a change of employment requiring USCIS notification. When an employer terminates the employment relationship, they are essentially withdrawing their petition. For this reason, it is important to notify USCIS immediately. “Informing the immigration authorities that the employment has been terminated is the quid pro quo to be relieved of one of the duties the employer promises to fulfill when it signs the labor condition application: the duty to pay the required wage.” (Limanseto v. Ganze & Company, OALJ 2011-LCA-00005 at 6-7). Notifying USCIS the employee relationship is terminated, allows USCIS to cancel the petition and relieves the employer of any liability to pay the employee. In a case where the employer was found not to have executed a bona fide termination for failure to notify USCIS and was found liable for backpay, the Court stated, “for the price of a postage stamp, the Employer often can absolve itself of further liability.” Id. at 7.

If the employer decides not to terminate the relationship and merely ceases to pay the employee, the employer can be found liable for “benching.” “Benching” is a term used to describe when an employer stops paying an employee and places the employee on non-productive status due to a decision made by the employer (ex. lack of work). (20 C.F.R. § 655.731(c)(7)(i)). If an employee is on non-productive status and the decision was not based on the employee’s voluntary request to be absent from work, (ex. voluntary resignation or going on vacation) the employer must continue to pay the employee the required wage rate. (Admistrator, Wage and Hour Division v. Itek Consulting, Inc., 08- LCA-46 (ALJ May 6, 2009 at 10). However, if the employer decides to terminate the employment relationship, notifies USCIS that there is a termination, and follows the other steps required to execute a “bona fide termination,” the employer is no longer obligated to pay the employee the required wage rate. (INA § 655.731(c)(7)(ii)).

Lastly, the employer must provide the employee with reasonable cost of transportation to his or her home country. (Amtel Group of Fla., Inc. v. Yongmahapakorn, ARB No. 04-087, ALJ. 2004- LCA- 006 at 11). The employer may cover the cost of return to the employee’s home country by purchasing a one-way plane ticket for the employee back to his/her last place of foreign residence. (8 C.F.R. 214.2 (h)(4)(iii)(E)). It is important to note that the employer is obligated to pay for the cost of return transportation only if the employee is terminated before the period of authorized stay. If the employee voluntarily terminates his employment prior to the end date of his authorized stay, the employer does not have to pay the cost of return transportation.

Moreover, an employer need not establish a valid basis or good cause for termination. For the purposes of determining a bona fide termination and avoiding back pay liability, the employer may terminate the employment relationship for any reason. (Amtel Group of Fla., Inc. v. Yongmahapakorn, ARB No. 04-087, ALJ. 2004- LCA- 006 at 10). However, the failure to prove every element of a bona fide termination leaves an employer liable for the entire period of authorized employment. (Limanseto v. Ganze, OALJ 2011-LCA-00005 at 8). Thus, the employer must (1) notify the employee of the employment termination, (2) notify USCIS the relationship is terminated so that USCIS may revoke approval of the petition, and (3) pay the employee the cost of return transportation to their last foreign residence. Once all three requirements have been met, there has been a bona fide termination and the employer no longer has a duty to pay the required wage rate.